Member Info for OofyProsser

Yes, and that’s been working well for Vast shareholders, innit?

WG818: it’s my unpleasant duty to point out a mistake in your 1.05 post today. The noble non-Executive Chairman of Angus is in fact Lord seven fingers. He possesses a full complement of thumbs, at the last count. If you had said “nine digits” you would have been on the money.

....money, not many.

Ocelot: if investors want to contribute to charities, there’s plenty to choose from. Angus was supposed to make tons of many for its shareholders from the Saltfleetby gas field, which it bought for £1 and expected to bring into production at a cost of £2.5mm, which is what the previous owners gave them as an abandonment reserve. It’s ended up like HS2. Over-optimism, incompetence, lazy thinking, resulted in massive debts and a record low share price. To say it’s a great achievement to have got it finished is to miss the point entirely. You can finish any project if you chuck enough money at it.

As for the proposed £20mm. Global Re-Financing loan, that’s all it is, a bigger loan. To pay off a slightly smaller loan or loans, and give Angus a very small cash buffer. You’re treating it as if it’s the loan that will make Angus debt-free. The expected interest rate is lower but I’d wait and see the details of the offtake agreement and the compensation to Mercuria for their forward gas contracts and their royalty, if I were you. I don’t know why Trafigura would offer Angus better terms than Mercuria had, on a bigger loan, with lower gas prices, the field depleting and huge future costs for drilling further wells and for boosting the gas flow. It’s not what happens in capital markets. The riskier the project, the higher the price of the finance for it. The many months of wrangling over the terms of the loan don’t bode well for shareholders. Angus are not in the driving seat here - Trafigura are. So far, the Saltfleetby investment has been a shambles as far as the owners of the company are concerned.

We should know more on Monday. Or, on recent form, some time next week.

It’s good news in the sense that talks are continuing. They’d been working for a while on the documentation on 19 January. Either the scribes at the counterparties and/or the lawyers are working to rule or it’s more than a matter of documentation, it’s a matter of detailed content. The talks with Mercuria, referenced in an earlier update, on the subject of the transfer of the forward contracts could be an issue. So could the details of the offtake agreement. Today’s RNS doesn’t move anything forward, it’s just another delay. The proof of this pudding will be in the final, detailed agreement, now due on Friday.

No, Ocelot, no fault on your part. There should have been an RNS today.

Millie51: that person’s timing was odd, if he knew something. If he did, he should have known that a GM was planned, and that a massive placing was required.

Lever: exactly, you’re correct, there is no valuation given to the parcel of diamonds in the company’s accounts. I think the Directors ate right in this.

The point I’m making about the debt is that the deadline for repayment hadn’t passed in any of those earlier years. This is the year when the debt should have been repaid and there’s no mention anywhere of an agreement to give Vast another month beyond this one in which to find the diamonds/money. I dare say that Mercuria could conclude a better deal at higher interest by providing the money for (for instance) Angus Energy’s proposed Global Re-financing. There must be many other better uses for it than Vast. In addition, Vast’s ability to access the equity market for further finance is now far more limited by its low share price. The risks are far higher now than they have been in the past.

...“find”, not “fund” in line 1.

Kever: if you will look at the 24 April 2023 RNS, I think you will fund that he didn’t.

It’s nonsense to suggest that discussions on their release preclude any value for the diamonds in the balance sheet. To attribute no value to them at all is either an offence, if the Directors believe they have a realisable value and that they will be returned to Vast, or an admission that the Directors believe they won’t be getting them back at all. I imagine the auditors have allowed their exclusion on the second of these assumptions.

Finally, for the past three or four years, Vast has been required merely to make a single capital repayment of £1mm. on its debts. Interest appears to be rolled up year by year. Since May last year, Vast has been allowed to roll over the repayment of the debt and outstanding interest month by month. It seems that this month the lenders’ patience may come to an end. There’s big risks here. I recommend a study of the auditor’s statement on Vast’s status as a going concern in last year’s Report and Accounts.

The 15mm. shares that Mr. Prelea acquired last year were, surely, the shares issued to him under the Company's Share Appreciation Rights scheme? They vested in May last year and expire at the end of 2025. Was he actually required to pay anything for them?

I notice that the most recent Report and Accounts attributes no value at all to the “historic parcel”.

Relative to the total value of its owners’ shares, Vast has massive borrowings which are due for repayment on 29 February, large tax obligations to the Romanian authorities and a massive negative annual cash flow. A company cannot go on and on like this. The Directors and the auditors pointed out the material uncertainty of the company ceasing to be a going concern respectively in the most recent half-yearly Report and in the audited Annual Report and Accounts. For all we know, Mercuria may have a better use for its money.

SANTIAGO: it’s not the consolidation that will settle the loans, it’s the supposed massive placing that will follow it, if the vote is in favour at the GM. The consolidation and bonus issue combined should result in fewer shares than are currently in issue. However, once the consolidation itself takes place, it seems to me the share price, which ought to be roughly six times the current price, will weaken considerably. So the number of shares to be placed could be astronomical, if it’s to clear the debt. It’s not going to happen, anyway, is it?

Incidentally, re Kever’s post at 18.13 yesterday under the heading “diamonds”, at no point is it made clear that the email that he has purportedly received from the company refers to the diamonds at all. There’s plenty of historic situations in which Vast is involved.

Kever: OK, would you talk me through the mechanics of a share issue to raise $10.4mm.? Or even half that amount? The market capitalisation of Vast is currently just over £4mm. And any share issue will not be to finance an exciting new acquisition, it will be to pay off debt. They’ll still be short of money and will still need frequent large placings to stay in business. Who’s going to buy all the new shares? If Vast can manage to get an issue away that will satisfy the lenders, good luck to them..

Mere repetition of the text of the RNS doesn’t lend strength to your case. You appear to be assuming that the lenders will just roll over the debt at minimal additional cost to Vast on 29 February. Well, good luck with that. Whatever happens, I expect the cost to shareholders to be a heavy one. We’ll have to agree to disagree, I don’t want to keep repeating myself and we have only a week to wait - if that.

Nevergonnaretire: I wish you good luck with this and hope there will be a rally in the share price that will enable you to get out at a better price.

Kever: “.....to provide a possible solution to the Company in the unlikely event of enforcement of security in favour of the Creditors, the Company has agreed with the Creditors to request Shareholders for such additional authority to issue shares as will, at a margin to the current share price, enable the Company to raise up to US$9.4 million so that the Creditors can be repaid in full.”

This doesn’t sound too good to me: “At a margin to the current share price” - this was when the shares were at 0.105p. How are they going to raise more than twice the current market capitalisation in a new share issue at anywhere near even the current share price? Why do you imagine the lenders have demanded this? What do you think is going to happen when Vast can’t get any kind of placing away by the deadline? It’s not even certain that shareholders will vote in favour - a lot of them seem to resent the kind of dilution that the current proposals from Vast imply. UKOG has pulled its GM in somewhat similar circumstances.

The final paragraph that you quote appears to me to be mere misdirection.

It’s actually rather worse than this. It’s extremely unlikely that Vast will get a placing away to raise sufficient money to pay the lenders what they owe them at the end of this month. As you know, the wording of recent statements on the position vis-à-vis the lenders suggests that the lenders will prefer to be paid out on time, this time. If Vast can’t manage this (and thy won’t be able to without the money from the sale of the diamonds) the lenders will be able either to exercise their charges or to impose harsher terms than the existing terms. Vast are over a barrel, they will have to take what’s offered. After which they’ll be pedalling ever harder to go backwards.

That’s all right then. The trouble is, Vast needs the diamonds by 29 February.

So the lenders are going to be happy merely with the passing of resolutions by Vast’s shareholders authorising more share issues, are they? Why did they not request something like this last year then? Don’t tell me they were expecting the diamonds to turn up! The light at the end of the tunnel for shareholders here is the train accelerating towards them. Even if the lenders don’t call in their loans, they’re in a position to require a renegotiation of their terms.

The first step is a share consolidation. The next step is a huge placing. The number of shares in this second step is a function of the $10.4mm. that Vast needs to raise, divided by the price per new share that buyers of the billions of new shares are willing to pay. I suppose a big mining company might be interested at the right price but if they bought many billions of new shares at a big discount to the prevailing market price, they’d probably be able to buy out the rest at the same price. Clearly, Mercuria are not interested in acquiring Vast or its assets, or they would have exercised their rights many months ago. Whichever way you cut it, if the diamonds don’t arrive by month-end, Vast’s future will be outside its own hands. Won’t it?

But who’s going to buy all the shares required to pay off Vast’s lenders?